India slams China: Rejects proposal of BYD to set up $1 billion EV manufacturing unit

The Central Administration of India has rejected Chinese

EV

Reasons for denial listed as security

According to the article, "security concerns" were raised over the Chinese proposal to produce EVs and batteries in India. Initially, the business intended to produce 15,000 electric vehicles in India per year. Further, the report stated, "Security concerns with respect to Chinese investments in India were flagged during the deliberations." Another official asserted that these kinds of Chinese investments were not conceivable by citing "existing guidelines."

India's presence of BYD

As per the report, BYD is already a major player in the Indian car industry. It plans to sell at least 15,000 EVs in 2023. Additionally, it disclosed its ambitions to modernise manufacturing capabilities and extend its distribution network in India. Those ambitions, however, appear to be in ruins now that New Delhi is so vehement about keeping Chinese competitors out of India's crucial industries, such as telecom, transportation, and the internet. BYD now operates a manufacturing plant in Tamil Nadu, a state in southern India, with a production capacity of 10,000 units annually.

India welcomes Tesla with open arms

The move coincides with current negotiations for a plant to be built in the most populated nation in the world between the Indian government and Tesla, controlled by US billionaire Elon Musk. An Indian official was reported in a Times of India article as stating, "Tesla has provided us with an ambitious plan, and we are optimistic that the outcome will be positive this time around, particularly because it involves both local production and exports."

India's actions to thwart Chinese investment

Following Chinese hostilities in the Himalayas in 2020, India implemented a policy that essentially restricted foreign direct investments coming from China. India requires prior clearance for investments from countries with Indian land borders, a move that some analysts have criticised as being anti-Chinese. 

The Indian government unveiled intentions in May of this year to tighten down on Chinese enterprises that attempt to circumvent this regulation by creating shell companies and obtaining subsidies that are often withheld from Chinese businesses.